Comparing US Foods (USFD) & SuperValu (SVU)

SuperValu (NYSE: SVU) and US Foods (NYSE:USFD) are both non-cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.

Earnings & Valuation

This table compares SuperValu and US Foods’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SuperValu $12.48 billion 0.06 $650.00 million ($0.56) -33.09
US Foods $22.92 billion 0.30 $209.79 million $1.17 25.74

SuperValu has higher earnings, but lower revenue than US Foods. SuperValu is trading at a lower price-to-earnings ratio than US Foods, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for SuperValu and US Foods, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SuperValu 1 6 2 0 2.11
US Foods 0 3 7 0 2.70

SuperValu presently has a consensus price target of $26.29, suggesting a potential upside of 41.85%. US Foods has a consensus price target of $31.67, suggesting a potential upside of 5.17%. Given SuperValu’s higher possible upside, equities research analysts plainly believe SuperValu is more favorable than US Foods.

Profitability

This table compares SuperValu and US Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SuperValu 4.08% 41.33% 2.32%
US Foods 1.11% 12.64% 3.61%

Insider and Institutional Ownership

83.3% of SuperValu shares are held by institutional investors. Comparatively, 97.0% of US Foods shares are held by institutional investors. 1.7% of SuperValu shares are held by insiders. Comparatively, 1.6% of US Foods shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

SuperValu has a beta of 2.29, suggesting that its stock price is 129% more volatile than the S&P 500. Comparatively, US Foods has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Summary

US Foods beats SuperValu on 8 of the 14 factors compared between the two stocks.

About SuperValu

Supervalu Inc. is a wholesale distributor to independent retail customers across the United States. The Company’s segments include Wholesale and Retail. The Company offers a range of advertised brand name and private-label products, including grocery (both perishable and nonperishable), general merchandise and home, health and beauty care, and pharmacy, which are sold through Company-operated and licensed Retail stores to shoppers and through its Wholesale segment to independent retail customers. The Company’s Wholesale segment provides wholesale distribution of products to independent retail customers. Wholesale is organized and operated through two geographic regions: East and West. As of February 27, 2016, the Company conducted its Retail operations through a total of 200 stores primarily organized under five regionally-based retail banners of Cub Foods, Shoppers Food & Pharmacy, Shop ‘n Save, Farm Fresh and Hornbacher’s, as well as two Rainbow and two County Market stores.

About US Foods

US Foods Holding Corp. is a holding company. The Company is a foodservice distributor in the United States. The Company, through US Foods, Inc. (USF), markets and primarily distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the United States. These customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. As of December 31, 2016, the Company provided approximately 400,000 fresh, frozen, and dry food stock-keeping units (SKUs), as well as non-food items, sourced from over 5,000 suppliers. As of January 31, 2017, it maintained 75 primary operating facilities, consisting of its 60 distribution centers and other supporting facilities.

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